SunRice in brand buy-up with $50m deal to buy KJ&Co Brands importer
SunRice has acquired a new major food import business, in a deal worth $50 million. Here’s how they plan to fund it.
SunRice has entered into a $50 million deal to buy branded food importer KJ&Co Brands, whose products range from Toscano breads, pizza bases and desserts to Hart&Soul ready-made meals and Bare Bakers snacks.
SunRice reported this morning that its purchase would be funded from existing cash reserves and available debt facilities.
KJ&Co Brands are already sitting Coles’ and Woolworths’ supermarket shelves, and are also distributed in New Zealand, which SunRice believes will leverage its existing sales, supply chain and procurement capabilities.
“KJ&Co Brands has experienced strong revenue growth and increased market share across key categories in recent years, and we believe there is potential to continue that growth,” SunRice SunRice Group Chief executive officer Rob Gordon said.
“This acquisition is strongly aligned to the SunRice Group’s 2022 Growth Strategy, and will complement the existing brands we have in our Riviana Foods business.”
Mr Gordon said the Group was keen to leverage its strong balance sheet to pursue value accretive mergers and acquisitions, which grew and further diversified earnings – particularly in its Riviana Foods and CopRice segments.
The 2020 SunRice annual report shows it held $458 million of capital & resources attributable to Ricegrowers Limited shareholders, as of April 30 this year, with total equity sitting at $481m.
“This acquisition is expected to deliver ongoing benefits to the Group, and be earnings per share accretive in the first full year of ownership,” he said.
The SunRice Group has entered into a securities purchase agreement to acquire 100 per cent of KJ&Co Brands, subject to there being no material adverse change in the business, with completion anticipated in December 2020.
KJ&Co Brands’ existing management team intend to transition across to the SunRice Group as part of the transaction.
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